Working & Social Security Benefits

To check your Social Security benefits you can create a personal account statement which will show you what your benefits are or will be. It will also show you a list of what your benefit contributions have been which you will be able to check for accuracy.Go to http://www.socialsecurity.gov/myaccount/ to create your free personal online Social Security information site where you can keep track of your earnings and verify them every year and get an estimate of your future benefits if you are still working

More; Americans are working in retirement and generating earned income which, when combined with Social Security benefits, can complicate their tax returns.

If you have retired before your normal retirement age and have started collecting Social Security benefits early, these benefits are subject to reduction for starting early and as your earnings increase. All Social Security recipients must deal with taxation on a portion of their Social Security benefits if their incomes exceed certain base amounts

As an early retiree, you must decide whether to start taking Social Security benefits early. Social Security benefits are reduced if started before the normal retirement age. If you also work, the Social Security benefits are subject to a further reduction. Social Security will temporarily cut back some of your benefits once you have earned more than $15,720 in a calendar year. You lose a dollar of Social Security benefits for every $2 earned over this amount. A special higher limit applies to the months in the year of normal retirement before reaching the normal retirement age If there are months when your Social Security benefits are further reduced due to income earned during early retirement, the Social Security Administration will increase subsequent retirement benefits in later years to make up for the reduction due to these earnings.

If you have income in excess of a base amountyou are subject to tax on up to 85% of those benefits. If this provisional income exceeds a base amount of $32,000 for single filers or $44,000 for joint filers, 85% of Social Security benefits are subject to tax. Your tax rate would depend your tax bracket but currently it can be no higher than 35%.

If you are receiving Social Security benefits and also workthe work limit on earnings for 2015 is $1310 per month or $15,720 per year. If you collect Social Security before full retirement age (between 66 and 67 for most people currently in the workplace) your benefits are reduced $1.00 for every $2.00 you earn over the limit.

In the year you reach full retirement age $1.00 is deducted for every $3.00 above a higher limit. Note: For higher earning retirees your benefits are also subject to taxation; however this is a separate issue from a direct reduction of benefits.

Your Social Security benefits and taxes you may have to paySocial Security payments are the main source of income for many retirees. You need to check all your other income to make sure your taxes will be a minimum.

To estimate whether you might owe taxes on your Social Security benefits you must, add your adjusted gross income, tax-exempt interest and one-half of your Social Security benefits. If you are married and your joint “provisional” income is less than $32,000, your Social Security benefits won't be taxed; however if your joint income is between $32,000 and $44,000, 50% of your benefits could be taxable. If your income is above $44,000, 85% of your benefits may be taxable. For single filers these numbers are $25,000 and $34,000. For more information, see IRS Publication 915.

This tax has been a surprise for many.

If you are receiving Social Security and wish to have money withheld to pay taxes owed, go to www.ssa.gov and download Form W-4V, Voluntary Withholding Request. The form will give you a choice of withholding 7%, 10%, 15% or 25% of your monthly benefits. Sign the form and mail it to your local Social Security office, which you can also find listed on the website.

​After attaining age 66, you can earn any amount & still collect full Social Security benefits.To maximize after-tax income if you are a single individual (or head-of household) you would want to keep your earned and unearned income plus one-half of your Social Security benefit under $25,000 total. If you are married, you would want to keep the same resulting jointly computed figure under $32,000. This would keep any of your Social Security benefits from being taxable.

​Once you reach retirement ageyour benefits are not reduced but as much as 85% of the benefits could be taxed if your income is above a certain amount, depending on your marital status. In general, Social Security benefits are taxed at a rate of up to 50%.of 85%, of their Social Security benefits would be taxable.)

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